There are many ways to give to the causes you care about. In the past, you’ve likely given directly to nonprofits working on issues that matter to you. Now, you might be considering ways to elevate your charitable giving to ensure your approach is organized, tax-advantageous, and meaningful — for you, your family, your community, and the causes you love.
While options like private foundations and commercial gift funds are worth considering, neither offers the benefits and simplicity of opening a charitable fund at a community foundation like ours.
Comparing Options
Establishing a charitable fund at a community foundation like the Sacramento Region Community Foundation provides you with opportunities to strengthen your local community, network with like-minded people, and maximize the impact of your charitable giving in ways that private foundations and commercial gift funds cannot.
| Charitable Fund with Us | Private Foundation | Commercial Gift Fund | Cash Gifts to Nonprofits | |
|---|---|---|---|---|
| Support public charities in the U.S. | ✓ | ✓ | ✓ | ✓ |
| Income tax deduction | ✓ | ✓ | ✓ | ✓ |
| Growth potential | ✓ | ✓ | ✓ | |
| Accept donations of non-cash items | ✓ | ✓ | ✓ | |
| Ability to name successors | ✓ | ✓ | ✓ | |
| No startup costs | ✓ | ✓ | ✓ | |
| No annual taxes | ✓ | ✓ | ||
| No annual 5% payout required | ✓ | ✓ | ||
| Grant and admin services | ✓ | ✓ | ||
| Anonymous granting option | ✓ | ✓ | ||
| Fees re-invested in our community | ✓ | |||
| Network with other philanthropists | ✓ | |||
| Personalized service | ✓ |
Just as there are similarities between these charitable giving options, there are also important differences donors should keep in mind. Among them:​
Tax-Smart Giving: Giving to a charitable fund at the Sacramento Region Community Foundation comes with tax benefits greater than those at private foundations. F0r exampe, donors can deduct gift(s) to charitable funds up to 60% of their adjusted gross income compared to just 30% of a private foundation gift.
Grow Your Impact: When you make contributions to a charitable fund at the Sacramento Region Community Foundation, they are invested by experts to maximize return based on the granting time-horizon of your choosing — all tax-free, unlike at a private foundation, which carries a 1.39% tax on net investment income.
Other benefits involve privacy and peace of mind: When you open a charitable fund at the Sacramento Region Community Foundation, you do not need to worry about navigating compensation rules, expenses, grant expenditure responsibility, tax filings, or any possibility of inadvertent self-dealing. Due to these benefits, many funds with us were originally private family foundations before families decided to simplify their lives by transferring their assets to charitable funds with us. And, for many, our deep understanding of the capital area’s needs and strengths is attractive and useful in helping shape charitable giving programs.
While other philanthropic options exist, they may not be the most beneficial strategy to accomplish your goals. Interested in learning how Donor Advised Funds could be an alternative to a private foundation for you, your family or your company? Please contact us to learn more.
The information provided here is general and educational in nature, and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific situation.
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